GST

Goods and Services Tax, India abbreviated as GST is a tax based on the consumption of goods or services throughout India. GST is an indirect tax which has replaced the previous indirect taxes. Direct taxes like – income tax, corporate tax etc, are not affected by the GST.

Goods and Services Tax (GST) was proposed in 1999, in the government of the then Prime Minister of India, Atal Bihar Vajpayee. Further, a committee was setup by Prime Minister Vajpayee under the then Finance Minister of West Bengal, Asim Dasgupta to formulate a GST model. Since then, the GST could not be implemented, until recently on 1^st July 2017 by the NDA (National Democratic Alliance) government led by the BJP (Bhartiya Janata Party).

Goods and Services Tax is an essential indirect tax reform in India. Before GST, India had many indirect taxes levied respectively by both central and state governments, resulting in high amount of taxes also requiring high amount of resources for their collection and maintaining records.

Integration of both central and state taxes into one, will forego many adversities of previous tax system i.e. multiple taxations, cascading, loss of time and resources etc. Besides, GST considers whole of India as one unified market, consequently promoting foreign investment.

By eliminating the cascading of tax at various levels, GST makes the goods cheaper for the registered dealers as well as the end consumer consequently leading to economic growth of the nation. India is a developing nation, still struggling with the issue of unemployment. GST is expected to create new employment opportunities in the field of taxation and accountancy along with vacancies in the manufacturing sector.

A centralized GST has resulted in elimination of various check posts during the interstate transportation of goods. The travel time of interstate goods transport vehicles, have reduced considerably by 20% due to the absence check posts. Also, the multi party involvement in GST will improve the compliance level.

GST will lead to a more transparent and corruption free taxation system. The GST is formulated in such a way, so that it benefits both the businesses and the consumers. India needed a better tax reform on indirect tax like the Goods and Services Tax. GST places India at a better place to negotiate in international market. Also, by bringing SMEs (Small and Medium Enterprises) and other organized sector, under its gambit, GST leads to a more stable Indian industrial sector and an improved economy.